Johnny Isakson

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I wish to honor in the Record the 25th anniversary of the Georgian Club, the first suburban city club in metropolitan Atlanta. The citizens of Cobb County immediately embraced the Georgian Club when it first opened its doors on April 19, 1983. I was proud to be a founding board member and I am proud to serve as chairman of the board of directors today. With its breathtaking view of the Atlanta skyline, the Georgian Club offers unparalleled service, fine dining, and a relaxed atmosphere. Its consistently high standards ensure an enjoyable experience every time. Many great leaders of Georgia have graced the halls of the Georgian Club, including my predecessor here in the U.S. Senate, Zell Miller, my colleague, Senator Saxby Chambliss, former Speaker of the House, Newt Gingrich, and President Jimmy Carter. The Georgian Club is the vision of Jim Rhoden who has contributed to Cobb County and Georgia in countless civic and charitable ways. It gives me a great deal of pleasure and it is a privilege to recognize in the U.S. Senate the 25th anniversary of the Georgian Club. The Georgian Club is a wonderful asset to our community and I congratulate this fine establishment on its well-deserved success.

Mr. ISAKSON

Mr. ISAKSON. That is right, $3,500 a year for each of the first 2 years you occupy it as a resident.

Mr. ISAKSON. I am here.

Mr. ISAKSON. Well, two or three points. The first one I made is still the valid point; that is, as those foreclosures are absorbed, values stabilize and go back up, and that supports the values that were there in the neighborhood for the people who are making their payments, not in foreclosure. That is No. 1. Forget about the tax credit. You ride through any neighborhood where somebody is in a house that is in trouble and look at the sign. It will say ``Drastic Reduction.'' ``Reduced.'' ``Foreclosed Property.'' ``Fire Sale.'' ``Thirty Percent Discount.'' All you have to do is open any newspaper in any urban area in American, and you can read the classifieds and see that today. That is what is doing the terrible damage. That is because those numbers are growing. So if the incentive is to absorb those that have been foreclosed on, then you lessen that downward pressure, you underwrite the house values, and the neighborhoods begin to restore. Remember this: The tax credit is only good for a year. It is only a finite period of time to drive people to the market in hopes that they will absorb those houses because if they do not, the only way they get absorbed is through deeper discounts because regulators are going to force those lenders to dump them. The deeper the discount, the more depressed values are, and the more difficult it is for anybody to sell their house at a reasonable value.

Mr. ISAKSON. I will.

Mr. ISAKSON. Mr. President, I come to the well specifically today to talk for a few minutes about the tax credit proposal that is included in the base bill as introduced by Senators Dodd and Shelby and approved by the Finance Committee, Senator Grassley, and Senator Baucus. To that end I want to pay particular thanks to the staff of the Finance Committee for the tremendous work they did with respect to the housing tax credit amendment which is now part of the base bill. I come here today, though, to correct some misinformation that has been appearing in the media particularly over the past weekend and in a couple of national publications and Washington newspapers with regard to the housing stimulus and tax credit being inappropriate or wrong. The presumptions of those who have written are absolutely inappropriate and wrong. Although they are attempting, I am sure, to contribute to the debate, they are in fact contributing to a tremendous misunderstanding about the reality of what the tax credits will do. For the sake of discussion, the tax credit is a $7,000, $3,500-a-year tax credit that goes to any family who buys and occupies as their residence any home that has been foreclosed upon or is owned by a bank or lender, new or resale, and any resale owned by an owner occupant who is fending foreclosure. There have been two comments made about what is wrong with this proposal that are exactly the opposite of what is really right about this proposal. No. 1, in one editorial it said it is rewarding people who did not pay their payments and punishing people who are making their payments. It is not rewarding anybody. If you are purchasing a foreclosed-upon house, the damage has already been done to the borrower. The family who didn't perform is not rewarded. In fact, they have already suffered their punishment. But everybody else in the neighborhood is suffering punishment because that vacant house sits there deteriorating and causing declining house values. Secondly, it does not punish the homeowner who is in their house making their payments because the truth is, that home owner is hurt more when a foreclosure sits vacant and unsold than it is when that property is taken, bought by a homeowner, reestablished, the lawn is kept, the values are stabilized. The fact is, we have an obligation at this critical time in our economy to do what we can to stimulate the market to solve our problems, not have a plethora of government solutions to problems. Stimulating the market to go back, absorb these houses, get them back in owner-occupied hands, get them out of REO inventory is precisely what we need to do. Now, I do not come to this opinion as someone who has no experience; I come to it based on experience 33 years ago, in 1975. I was in the business. The United States had gone through a serious decline in housing. We had a problem. We had a 3-year supply of new houses standing unoccupied on the market. Buyers retreated because they did not know where the bottom was. The economy went down. Everything was in a mess. Gerald Ford, a Republican President, and a Democratic Congress came to this very floor and introduced a $2,000-a-year tax credit to any family who went and bought one of those standing vacant new houses only--not any house, the standing vacant new houses that were there, the problem houses. They passed the $2,000 tax credit. The market immediately responded. Within the 1-year window of opportunity for that credit, two-thirds of the standing inventory was absorbed, home values stabilized and began to go up, and the economy returned to vitality. So I ask those who are writing in criticism about a bill rewarding people who did bad things and punishing people who did it right, they are exactly the opposite; the damage has already been done when the foreclosure has taken place, and the reward is to stabilize neighborhoods for those who are in their homes and paying. I think the wisdom of the Finance Committee and the Banking Committee to incorporate this provision is an insurance policy that we in Congress can do good things to drive the market, to help solve problems. You hear all those problems about us making payments for people and doing things to take money from one American and give it to another in a time of trouble. That only postpones the inevitable. It does not solve the problem. But stimulating buyers back to the marketplace to absorb those houses that have been foreclosed upon or are pending foreclosure addresses specifically the housing crisis in this country, absorbs specifically the houses that are causing us problems, reestablishes values in our neighborhoods, and stabilizes the values of those people who are in their homes making their payments, doing what is right. So with all due respect to those who have opined over the weekend, they are absolutely incorrect and wrong in terms of the applications of this credit. It will, in fact, be a boost to the economy, a boost to the housing market, and a stabilizing factor on home values and equities in the United States of America. I yield the floor.

Mr. ISAKSON. The Senator's question is right on target. My answer to you is not an opinion, it is a statement of what actually happened in 1975. In 1975, there was no demand for housing because the plethora of houses that were on the market that had been foreclosed on that were built new were not being sold. Nobody was in the market. When the $2,000 tax credit was established and those houses began to be absorbed, the housing values stabilized. So there was not a disadvantage to the person who was trying to sell who was in the house, it was actually an advantage. The disadvantage you have right now is nobody knows where the bottom is. Because foreclosures are taking place, the values are going down. Those values, because of the cost-to-replace method of appraising, which is used by all lenders, decline the value of appraisals of houses that are pending on the market. It is a domino effect that affects everybody. The tax credit, by absorbing those houses that have been foreclosed upon and are vacant and are bringing down values, undergirds the market and raises those values for everyone.

Mr. ISAKSON

Mr. ISAKSON. I thank the distinguished Senator from Texas for allowing me part of the time. I ask unanimous consent to be recognized for 10 minutes.

Mr. ISAKSON. I associate myself with the remarks of the distinguished Senators from Texas and Missouri. I am grateful for great Americans such as David Petraeus, and I am particularly grateful for the young men and women, Americans who volunteer day and night, who go to defend liberty, peace, and freedom around the world. I come to the floor now for just a few minutes to speak on the housing bill pending, coming back, and the stimulus bill coming to the floor, and a cloture vote that is going to take place at 2:15.

Mr. ISAKSON

Mr. ISAKSON. Would the Senator yield for a question?

Mr. ISAKSON. Mr. President, I wish to ask the Senator from Maryland a point of clarification for the Members. This amendment is an additional tax credit in addition to the one that is already in the bill; is that correct?

Mr. ISAKSON. So what you are doing, you leave targeted the stimulus to absorb the foreclosed properties, but you add a stimulus for first- time home buyers in the marketplace?

Mr. ISAKSON. I wanted to make sure that is reflected in the Record.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I thank the Senator from Texas. While the chairman of the Finance Committee is on the floor, I express my appreciation to him, Chairman Baucus, on the hard work that has been done on this particular legislation, in particular, the tax credit on foreclosed homes, and to praise his staff for the late night concentrated hours Tuesday night and early Wednesday morning when this was put together. It was a remarkable effort and I wanted the chairman to know how much I appreciate it.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I am delighted to come to the floor today to praise the Senate for the most recent action in approving the motion to proceed on the issue of the day in America, and that is the housing crisis, the mortgage crisis, and what has been happening to our homeowners, mortgage companies, and our communities. I pay particular attention and thanks to Harry Reid of Nevada, the majority leader; Mitch McConnell of Kentucky, the minority leader; Chuck Schumer; Lamar Alexander; John Ensign; Chris Dodd; Richard Shelby; and a host of Members who came together, and instead of agreeing to disagree, agreed to agree and set a platform from which this Senate, in only the way the Senate can do it, can deliberate the most pressing issue of the day. I thank them for incorporating and including me in those discussions, and I want to share one of the things I shared with them and what I think should be a key part of any solution we offer on behalf of the housing market and the mortgage crisis. One of the good things about getting older--and I am 63--is that you have had a lot of experience, hopefully all of it good, but it is not all good. I was in the real estate business for 33 years before I came to the Senate, and I was in it in 1974 when we went through one of the worst housing recessions ever. I was also in it, thank goodness, in 1975 when a Democratic Congress and a Republican President, Gerald Ford, brought forward a tax credit bill to stimulate the housing market. In 1975, we had a similar problem. We had gone through a period of easy credit and lousy underwriting, except it wasn't on the mortgage side, it was on the construction loan side. At banks around the country, if a guy came into the bank and had a pickup truck and a hammer, he qualified as a builder, and he went out and bought a lot and started building spec houses. Banks made the loans and even advanced some of the development costs. Some A and D lenders would loan 100 percent of the cost of the acquisition and 20 percent of the development--crazy underwriting. It led to a plethora of new houses being built but no buyers for these houses. The United States found itself in the position of having a 3-year supply of standing new inventory on the market and no buyers. What happened? Values started declining, grass started growing, and vandalism started taking hold on the vacant houses. It was a horrible situation. The President and Congress came together and said: Why don't we stimulate the market to absorb these houses, get the buyers back into buying houses. We passed a $2,000 tax credit to any family who bought and occupied as their principal residence a single-family new house that had been built, not a resale or any other house, but a single-family new house that had been built and standing in inventory. We passed that $2,000 credit which, to give some idea of perspective, was about 8 percent of the value of an average house at that particular time in the marketplace. What happened is overnight, buyers sitting on the sidelines came out. They bought the standing houses that had been vacant and unseen for months. Housing values stabilized and began to go up, the economy turned around, and we went out of a recession, into prosperity, absorbed the inventory, and we did not bail anybody out. We just motivated homebuyers to do what they do best, and that is buy the designated houses which were the problem. Two months ago, I introduced a similar bill based exactly on that experience, except instead of $2,000, it was a $15,000 tax credit earned over 3 successive years, the first 3 years after the purchase, of any one of a category of three types of houses: Category No. 1, a new house built unsold, vacant, and permitted prior to September of last year. Any builder in America who permitted a house before September of last year did so when times were good. There was no looming indication we were going to get into the problem we are in now. They got caught like a lot of these homeowners and junk mortgages got caught, subprime mortgages. Second, a house that qualifies is a house that has been foreclosed upon, the foreclosure has been adjudicated, and it is owned by the lender or the lender's designated agent. That is a standing vacant house foreclosed on and up for resale. The third category is any house in foreclosure pending adjudication. That means it is being advertised, a foreclosure notice has been posted, and the house will be foreclosed on but has not yet. Any one of those three types of houses, which is where the growing inventory is, will be eligible for the buyer to earn a $15,000 tax credit allocated over the first 3 years in which they occupy the home. If it is a speculator in foreclosure, it does not qualify. If it is a speculator who is trying to buy, they don't get the tax credit. This is to stimulate houses being bought that are in trouble, owner occupied by principals who bought those houses, and it qualifies for people who will buy those houses, refinance them, pay off the loan, and live in them as their residence. What is going to happen, if the Congress is able to come together and pass a tax credit proposal such as that, is we will instantly stimulate the housing market and the marketplace, and the consumers will begin absorbing the standing inventory that is in foreclosure or pending foreclosure or is new and has been sitting since September of last year. That is precisely where the problem is. That is precisely what needs to be absorbed. There are a few people who said: What about people who have been making their payments and are not in trouble; why don't you get the credit for buying their house if they want to sell it? That is not where the problem is, No. 1. No. 2, they are suffering from all these vacant houses being out there as well because housing values are declining, appraised values are declining, equities are shrinking, and equity lines of credit are drying up. We need a focused, targeted absorption vehicle to see to it that the buying public solves our problem for us. That is the right way to do it. One other feature of the proposal is the tax credit will only be available and able to be earned on a purchase of a designated property made between April 1, 2008, and March 31, 2009--a 1-year window of opportunity. That creates the urgency of the situation, it motivates people to get into the marketplace or lose that opportunity, and it will be a significant catalyst to the marketplace, solving a significant problem for the United States of America. I encourage my colleagues on the Banking Committee. I appreciate their consideration of this proposal and this concept. I hope that when the bill comes to the floor either in the base bill or in the amendment process, we can address a past solution that worked and add it to a contemporary problem that was identical to what the problem was in 1974 and 1975. I end where I began. I thank my Democratic friends and my Republican friends who came together and decided to make something work rather than figure out how we can just be against one another. Senator Schumer has been a catalyst in this effort, Senator Ensign, Senator Alexander, Senator Reid, obviously, Senator Dodd, and Senator Shelby. I pay tribute to Senator Tom Carper who talked with me over weeks about the proposal I just discussed and finding some way to bring it to the floor of the Senate and get it out there so we can address the problems that exist in Delaware, Missouri, Georgia, Nevada, and in all the 50 States over the United States of America. I am privileged to be the author of the amendment. I will be proud to be part of a team that does not want to take credit but wants to get something done, put together a bipartisan bill that addresses the most contemporary problem today in the United States of America, and that is the housing crisis. I yield the floor and suggest the absence of a quorum.

Mr. ISAKSON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. ISAKSON

Mr. ISAKSON. Yes.

Mr. ISAKSON

Mr. ISAKSON. I thank the Senator.

Mr. ISAKSON. Mr. President, today, I will pay tribute and make some celebratory remarks about two exciting lives in my community. First is the upcoming celebration of the 80th birthday of Mack Henderson, a man in my community who, besides being a leader, has been a warm and trusted friend. He and his wife Jean have been pillars of our community. The women's health care facility in Kennesaw was named after them as a tribute. Mack's daughter lives in this area, in Alexandria, VA. She has been a great friend to me. The entire Henderson family is going to gather to celebrate the 80th birthday of Mack Henderson, a great American and a great citizen of Cobb County. I wish him a most happy birthday. On March 10, another birthday occurred--the very first of my grandson, William Edwin Isakson, born to my son Kevin and his wife Katherine Isakson. William is our eighth grandchild. He weighed 7 pound 9 ounces. He has a great future ahead, and I wish him the very best. It occurred to me, when I was coming to the floor to pay tribute to Mack Henderson on his 80th birthday and to recognize the birth of my eighth grandchild, that as I look into the future, I wonder about what has been said in recent months about Social Security and Medicare and about what Mack Henderson has enjoyed in his life and what I hope we can save and procure for the life of young William Edwin Isakson. In Mack's early years, Social Security was created. It was a promise to Mack and to every citizen in America that when you reach the age of 65, and when you sign up and are declared eligible, you will receive a supplement to help you in your retirement years. Mack has been retired for 15 years and is enjoying the benefit of that. Last week, the Social Security Administration sent out a mailer notifying us that the time the Social Security goes bust is now moved forward to 2041. So in Mack's lifetime, Social Security was created, and by the 33rd birthday of my new grandson, Social Security will be gone. Even worse, Medicare, created after Social Security, has benefitted Mack. He has had a heart transplant and other medical problems, and he came through them with the help and assistance of Medicare. As for my grandson William, before he is a teenager, Medicare will be broke, inverted, and gone. As a Member of the Senate who takes a privilege to come to this floor and celebrate the birthday of a great friend and the birth of a new grandson, I know I have some work to do. So do the other 99 Senators and the 435 Representatives on the other side of this building. The President who serves now, and who will go out of office in January, has made an effort on Social Security, and it was rejected by organizations and others. It was an effort of privatization. The next President will not be so lucky to be able to neglect this. Time is running out. The next President will probably serve for 8 years. When they are out, it will be 2018, 1 year before Medicare goes broke. I don't think we can afford to allow that to happen. As I come to the floor and pay tribute to these great lives which are so meaningful and significant to me, it is also an early warning for all of us to get to work on Medicare and Social Security. I commend Judd Gregg, the Senator from New Hampshire, for his efforts time and again to get us to deal forthrightly with these issues. They are not going to be easy. I don't want to ever face seeing Medicare go out of business and Social Security go broke. I am willing to stand up and take the heat and make the recommendations and work hand in glove with my fellow Republicans and with Democrats to see to it that the events on those two dates--the date of the death of Medicare in 2019 and end of Social Security in 2041--never take place. Between the two sides of the political spectrum, we can find common ground if we have a willingness to establish a goal and achieve it. I will never forget when President John F. Kennedy came forth to the people in America and declared that one day--8 years later--the United States would launch a man to the Moon, land him on the Moon, and bring him home safely. We didn't know how to do that; we didn't have the foggiest idea. We were getting beaten badly by the Soviet Union in mathematics, science, exploration and technology, and he was daring us to do something nobody knew how to do. We did it by July of 1969. I don't think saving Medicare and Social Security is as difficult or as technical as getting a man to the Moon and bringing him home. But it is equally as important--maybe more so--for the health, welfare, and livelihoods of our oldest friends who are in the twilight of their years and our children born to us this year; and it is very important to the United States. So this Senator pledges to his newest grandson that I will stand up anytime, anyplace, or anywhere and work with my colleagues in the Senate to begin the job of seeing that we fix Medicare and Social Security and that we preserve the promise for our grandchildren that our grandfathers have enjoyed and prospered with. I yield the floor.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I wish to honor in the Record Temple Emanu-El in Dunwoody, Georgia. On March 29, 2008, Temple Emanu-El will celebrate its 30th anniversary with a black tie gala. This traditional reform synagogue was founded in 1978 by a small group of families determined to create a spiritual home where they and their children could live and grow in the Jewish faith, and they certainly have grown. Temple Emanu-El now serves over 800 Jewish families in the metro Atlanta area. The members of this thriving and vibrant congregation should be commended for their dedication to their faith as well as their community. It gives me a great deal of pleasure and it is a privilege to recognize on the floor of the Senate the contributions of Temple Emanu- El. I congratulate Rabbi Julie Schwartz and the entire congregation on its 30th anniversary and its bright future.

Mr. ISAKSON

Mr. ISAKSON. I am happy to yield.

Mr. ISAKSON. Madam President, I thank the Senator from Florida, and I acknowledge that he is a former Secretary of the Department of Housing and Urban Development, who has done tremendous work on the housing issue. I concur with each of his remarks. I will close with this. When you talk about ``just say no,'' we ought to have been on the stimulus debate when we got back here on Tuesday. For some reason, and because the majority wanted to, we have been debating the Iraq situation while the stimulus and housing sit on the sidelines. I hope we can get through these gymnastics and get to a situation where we can debate good ideas on both sides and not preclude and leave people out. Instead of saying ``just say no'' to amendments and to a sincere effort, say yes to what this body is all about: deliberation, decisions, and doing what is right for the people of America. I yield the floor.

Mr. ISAKSON. Madam President, I wish to acknowledge the kind remarks of Senator Schumer with regard to a proposal I have made. For the public's edification and amplification, nobody over here is just saying no, except the majority leader just said no to offering our amendments to the stimulus package we want cloture on. What we are going through right now are some gymnastics and the gymnastics are this. Members on both sides of the aisle want to do something because we do recognize there is a housing problem, because there are ways we can help the American public. But you can't address all those ways if you don't allow all those ideas to be debated as a part of the amendment process on the legislation. So I appreciate the kind remarks of the Senator regarding my proposal, but a favorable comment doesn't do us any good if you can't offer the amendment on the floor. I don't think I have all the good ideas. I don't think they have all the good ideas. I think, collectively, we probably do have all the good ideas. But this is not about just saying no. This is us saying yes to a process that is open, a process that is debatable, a process where we can reach out and try and help the American people, particularly those who are having great difficulty because of the housing market today. So I wished to throw that in. My remarks were intended to be about Iraq, which I am going to close with, but I had to respond to the statements the Senator from New York made.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I stand before you today to congratulate the Peace Corps on 47 years of service. The Peace Corps was founded on March 1, 1961, when President John F. Kennedy signed an Executive order establishing the Peace Corps as a new Government agency. Over the years, 190,000 volunteers, including nearly 2,700 Georgians, have served in more than 139 countries around the world. Throughout its history, Peace Corps volunteers have responded to the issues of this world with energy, purpose, and compassion. From February 25 to March 3, 2008, thousands of former Peace Corps volunteers will share their experiences with schools and community groups across the United States during Peace Corps Week. Through these activities, former Peace Corps volunteers will help our citizens better understand the advantages of becoming a Peace Corps volunteer. They will also have the opportunity to educate about the people and cultures they have encountered during their service. Additionally, by making presentations in classrooms, former volunteers will help create greater global awareness among students. I also want to take this opportunity to pay tribute to the late U.S. Senator Paul Coverdell of Georgia, who was my good friend and colleague for many years. As the corps' first post-Cold War director, Paul steered the Peace Corps into a new era. I was pleased the President honored Paul posthumously in 2001 by renaming the Peace Corps headquarters in Washington, DC, as the Paul D. Coverdell Peace Corps Headquarters as well as renaming the Peace Corps World Wise Schools program as the Paul D. Coverdell World Wise Schools program. I am proud to support an organization that such a distinguished Georgian was so instrumental in shaping. I am pleased that the President announced the reopening of a Peace Corps mission in Rwanda during his visit to the country last week. I believe the Peace Corps will make an important contribution to the recovery of that country. Today, there are 8,079 Peace Corps volunteers and trainees in 68 posts serving 74 countries. Of those volunteers, 160 are from my home State of Georgia. I want to take this opportunity to thank those Georgians and all Americans who have served in the Peace Corps. The Peace Corps is a critical piece of our diplomatic and humanitarian efforts worldwide. I look forward to supporting the Peace Corps as a Member of the Senate.

Mr. ISAKSON

Mr. ISAKSON. The President of the United States--I believe it was 9 days after 9/11--announced the change of U.S. policy to be one of preemption. That is what I addressed in my remarks. The FISA reference I made was to say that I found it a little unusual for the people who were supporting the bill of the Senator from Wisconsin--whom I completely respect--to be most of the same people who voted against us having the intelligence to be able to preempt them. And then to have a bill that portends we don't have a policy? I just didn't think it made good sense.